Sixteen companies have obtained financial technology (FinTech) licences from Egypt’s Financial Regulatory Authority (FRA) and are spearheading digital transformation efforts in the non-banking sector, its chairperson Mohamed Farid said on Monday.
Four companies currently offer outsourcing services and are registered with the authority, with new entrants anticipated, Farid stated.
Speaking at the fourth edition of Caisec25, an information security and cybersecurity conference and exhibition in Cairo, Farid said that approximately 110 institutions and entities currently comply with the FRA’s cybersecurity requirements. He noted, however, that the total number of companies and institutions under the FRA’s supervision across various activities and markets exceeds 3,500.
Farid added that four companies currently provide outsourcing services, with significant potential for this number to grow into the dozens. “These companies are listed in a special FRA registry and conduct electronic identification, verification, and authentication; electronic customer identification; electronic contracting for non-banking financial products; and electronic registration, storage, and retrieval from digital records,” he detailed.
In his conference address, Farid outlined the FRA’s ongoing efforts to foster a secure and stable environment that strengthens the non-banking financial sector’s contribution to the national economy. This is part of its continuous endeavour to implement all necessary measures and policies to protect customer data and ensure market stability.
“The Authority, as the regulator of the non-banking financial sector—which encompasses the capital market, insurance activities, and non-banking financing activities—places significant importance on cybersecurity,” Farid stated. “This involves developing policies and systems to protect customer data, thereby ensuring market stability, a key role for any financial sector regulator.”
He emphasised that the FRA is working to create a secure data environment and stable markets for non-banking financial institutions, aiming to bolster the non-banking financial sector’s role in the national economy.
Farid added that the regulatory framework established by the FRA primarily recognises that “cyberattacks and database breaches have become the new battleground.” Therefore, enhancing cybersecurity measures is crucial, “especially given the accelerating pace of digital transformation across all sectors, which, while creating new opportunities, also generates increased cyber threats,” he said.
He explained that this “necessitates swift action to develop policies and operational systems that strengthen FinTech governance and ensure non-banking financial institutions utilise these technologies in a manner that promotes market stability.”
The FRA chairperson noted the “rapid and revolutionary pace of development in artificial intelligence (AI),” stressing the importance of enhancing the recovery capabilities of institutions and markets, particularly as development inherently involves risks. He advocated for increased preparedness to ensure “a resilient non-banking financial sector capable of leveraging technological advancements and managing associated risks more efficiently and effectively.”
Farid also highlighted that “technological capability development must go hand-in-hand with enhancing human resource efficiency to achieve desired objectives and bridge information gaps.” He explained that “the human element remains paramount in corporate business models,” and consequently, “specialists in electronic and cybersecurity technologies and innovations must focus on providing extensive, varied, and continuous training for personnel.”
The FRA chairperson affirmed that such training has become essential following the recent acceleration in the digitisation of non-banking financial transactions. This acceleration was spurred by the FRA’s issuance of a package of executive decisions to implement Law No. 5 of 2022, which provides the regulatory and legislative framework for organising and promoting the use of technology in non-banking financial activities and services.
He continued: “The Financial Regulatory Authority issued Decision No. 139 of 2023 concerning the technological equipment, infrastructure, information systems, and protection and security measures necessary for using FinTech to conduct non-banking financial activities. This was followed by Decision No. 140 of 2023, regarding digital identity, digital contracts, digital registries, and the scope of FinTech use in non-banking financial activities, along with compliance requirements. This latter decision is considered the first regulatory directive from financial sector supervisory bodies to detail requirements for electronic customer identification. Furthermore, Decision No. 141 of 2023 pertains to the outsourcing registry for FinTech in non-banking financial activities, specifying companies authorised to provide electronic customer identification and contract record services to financial firms in the sector.”
